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The Situation Room
Stock Markets Rebound; Business Winners and Losers
Aired March 13, 2009 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: This hour, is an alleged drug kingpin being glorified?
We want to welcome our viewers in the United States and around the world.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
Wall Street's luck held out on this Friday the 13th. Check out the Big Board. The Dow Jones industrials closed up for the fourth straight day, its best week of the year. And it's helping team Obama today, driving home a point, a more upbeat message about the economy and the bargains to be had out there.
In plain terms, one top economic adviser says it's time for investors to stop being afraid.
Let's go straight to our White House correspondent, Dan Lothian. He's got the story.
A new, more upbeat, more hopeful message, Dan, coming from the White House?
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: And that's true.
And the reason is because they believe here that a lot of Americans are really afraid when it comes to the economy. And they see the bad news coming out day after day, so their concerns only grow. And that's why, as you pointed out, there's a more upbeat message now coming from the White House.
(BEGIN VIDEOTAPE)
LOTHIAN (voice-over): With stocks, housing, and jobs in the tank, the president's top economic adviser suggested some may consider this crisis the sale of the century. And Larry Summers is advising companies sitting on the sidelines to jump in.
LAWRENCE SUMMERS, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Those who have sound long-term strategies, who have investments that they want to make, who see productive opportunity are going to find this a very good moment. There are a very large number of things that are on sale today.
LOTHIAN: President Obama made a similar endorsement of the stock market last week. OBAMA: Profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it.
LOTHIAN: The White House was quick to knock down suggestions that Mr. Obama was encouraging Americans to buy. Spokesman Robert Gibbs was at it again.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I don't think today's speech was designed to provide stock tips for the American people. But, instead, to demonstrate a road map forward that the administration and the economic team have developed to get our economy moving again.
LOTHIAN: And one of the cylinders to get the economic engine moving again appears to be confidence. In recent days, the administration has made a clear shift with more positive talk. From the president --
OBAMA: We're going to get through this. And I'm very confident about that.
LOTHIAN: And those around him.
SUMMERS: What we need today is more optimism and more confidence.
(END OF VIDEOTAPE)
LOTHIAN: The administration says that it's really too early to gauge the impact of their efforts. But they are encouraged by some small signs. However, they are jumping on that sign, that banner that we saw during the Bush administration, spokesman Robert Gibbs saying -- quote -- "We haven't flown any 'mission accomplished' banners" -- Wolf.
BLITZER: Not yet. All right, thanks very much, Dan.
Could the killings, kidnappings, the assassinations and all the drug war violence come to your city? What's happening in northern Mexico potentially could spill over into the United States.
And that's why the homeland security secretary, Janet Napolitano, is now sending a large contingent of extra federal agents to the southern border. They will increase the search of cars and more intelligence analysts will be on the border as well.
Meanwhile, the secretary of state, Hillary Clinton, will go to Mexico as a sign of America's support in fighting the drug cartel. The State Department says that will happen this month.
One man who officials say is partly responsible for the drug- fueled violence in Mexico and elsewhere has now received a rather high honor.
Let's bring in our homeland security correspondent, Jeanne Meserve, for this amazing story.
What is going on?
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Very controversial story.
Despite the global recession, Bill Gates and Warren Buffett still top "Forbes" magazine's annual list of the world's richest billionaires. But now joining the software mogul and the investor on the list this year, Mexican drug lord Joaquin Guzman Loera, known as "El Chapo."
He is tied for 701st place on the list, with an estimated fortune of $1 billion. Guzman Loera heads the Sinaloa drug cartel. That's one of the largest in Mexico, responsible for much of the surging violence along the U.S./Mexico border.
BLITZER: What is Guzman's background in all of this?
MESERVE: Well, he's 54 years old. He has a 30-year history of drug trafficking across North, Central, and South America. And in the past few weeks, 781 members of his cartel have been arrested here in the U.S. And the DEA is offering a $5 million reward for his capture.
Mexican officials are not happy that the drug kingpin is sharing the spotlight with the likes of Gates and Buffett. Mexico's attorney general said "Forbes" is comparing the deplorable activity of a criminal with that of honest businessmen.
"Forbes" refused to comment, but one reader of the magazine's Web site posted this comment: "Why did you leave Bernard Madoff off of your list?" -- Wolf.
BLITZER: Good question. Thanks very much.
The Obama administration is abandoning a key phrase from the president's -- from President Bush's war on terror. That would be the phrase enemy combatant. The Justice Department now says it will no longer use the term to justify holding prisoners at Guantanamo Bay.
But that won't change much for detainees at the U.S. Naval Base in Cuba. The president still asserts the military has authority to hold terror suspects there. Mr. Obama recently ordered the facility closed within a year.
A new lawsuit is accusing two of the nation's largest mortgage companies of systematic, institutionalized racism. The suit filed by the NAACP targets the firms Wells Fargo and HSBC. The civil rights group cites several studies that show African-Americans have been harder-hit than most people by the subprime lending crisis.
(BEGIN VIDEO CLIP)
BENJAMIN JEALOUS, PRESIDENT AND CEO, NAACP: We have targeted these banks because we have gone through what we can get our hands on, and it seems like there's a real problem here. With that said, what we want is transparency. You know, we want to see the books. We are not seeking damages. We just want them to fix the problem.
(END VIDEO CLIP)
BLITZER: A Wells Fargo spokeswoman says: "The NAACP's are totally unfounded and reckless. We have never tolerated and will never tolerate discrimination in any way, shape or form in any of our business practices, products or services."
The firm HSBC also stands by its lending practices.
We now know just how wealthy Wall Street swindler Bernard Madoff was. He and his wife were worth more than $823 million, that according to Associated Press. Newly filed court documents detail the Madoffs' assets as of the end of 2008.
Those assets include property worth $22 million, and $17 million in cash. Madoff pleaded guilty yesterday to scamming investors in one of the biggest frauds ever.
Let's go back to Jack Cafferty. He's got "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: There is a big philosophical divide when it comes to whom Americans trust to right our economic ship.
A new Gallup poll shows 64 percent of Republicans say they place more trust in business, while 72 percent of Democrats say they trust the government more to fix the nation's economic problems. Independents are pretty much split down the middle.
In another question, Gallup asks whether the government is doing too much or not enough to solve the country's problems. A whopping 84 percent of Republicans say the government is doing too much, compared to 22 percent of Democrats. And 69 percent of Republicans say the government has too much power, compared to 32 percent of Democrats.
This huge partisan divide comes at the time that Americans are viewing the role of government when it comes to trying to deal with the massive action they're taking to solve the banking and housing crises, the credit crisis, rising unemployment, and on and on.
So far, President Obama continues to get strong backing from the public, although some of his economic plans are not as popular as he is. On the other hand, Wall Street has been less than pleased with many of the administration's moves to try to rescue the economy.
So, here's the question. When it comes to the economy, whom do you trust?
Go to CNN.com/caffertyfile. Post a comment on my blog.
The correct grammatical question is, "Whom do you trust?" The incorrect way to say that is, "Who do you trust?" which is what they called the old Johnny Carson quiz show before he became the emcee of "The Tonight Show."
BLITZER: I remember that...
(CROSSTALK)
CAFFERTY: "Who Do You Trust?"
BLITZER: "Who Do You Trust?" It was a good show.
CAFFERTY: Grammatically incorrect.
BLITZER: But it was grammatically incorrect. You're absolutely correct.
(LAUGHTER)
BLITZER: Thank you, Jack.
And the awards go to -- you're going to find out which businesses are winning and losing U.S. customers in this recession.
Also, he patrols city streets right now as a police officer, but he still has nightmares of patrolling the streets of Iraq. What's life like now for a man who served three tours of duty in that war?
And protests against don't ask/don't tell -- a congressman now comparing the U.S. to some U.S. adversaries when it comes to the policy. And he wants it repealed.
(BEGIN VIDEO CLIP)
REP. JIM MORAN (D), VIRGINIA: It seems to me it's time we started doing the right thing. And we can't afford to do otherwise. We need these skills.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
BLITZER: The sixth anniversary of the Iraq war is coming up next week. One veteran who did three -- repeat, three -- tours of duty there is now finding out there is life after the war in Iraq.
Let's bring in our chief national correspondent, John King. He's the anchor of CNN's "STATE OF THE UNION," which airs Sunday mornings.
This is a very compelling story that you found.
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: It's an interesting man.
He was Sergeant Chris Tucker when he was in the Army, Wolf. And I want to bring up the state of Georgia here. We went down to visit him in Savannah. We will show you him. Now he's a police officer in the Savannah-Chatham Department. And we out on patrol with him. He was telling us some of the skills he learned in Iraq he now uses to look for criminals in the Savannah area. But Chris Tucker was in Iraq three times. He left the Army with a bit of a sour taste.
And as we revisited him this week, one of the things we wanted to learn about is what is life after Iraq, and what does he think as he looks now at a new president, a new commander in chief trying to end the war.
(BEGIN VIDEOTAPE)
KING (voice-over): When we talked just before his third deployment in 2007, Tucker was taking medications for depression, had major hearing loss, and injuries to his back and both feet. The Army said treatment could wait.
CHRIS TUCKER, IRAQ WAR VETERAN: You would hope that they would take care of you better. It makes you realize that we're -- we're stretched kind of thin.
KING: Home now, his experience tells him things in Iraq can take sudden turns for the worse. And, so, he is skeptical of the new president's promise to bring most troops home by August 2010.
TUCKER: I think we're in too deep just to pull out. You can't just commit the way we committed and then just walk away and say, OK, we're done. Politics I think shouldn't be involved in how war is handled.
KING: His experience also tells him it is best to focus on his new work or his new daughter.
TUCKER: I try to distance myself from it as much as I can. For me, the more I think about it, the more I will reflect on what happened, what we did, the more I think the actual -- the dreams and the nightmares and things like that actually come back.
(END VIDEOTAPE)
KING: And he still has those nightmares, Chris Tucker, sometimes waking up in the night, finding himself downstairs in the house. He says he can't figure out how he got there, still disturbed, Wolf, but a very fascinating guy, a compelling story.
His young daughter is beautiful. Chris Tucker, now a police officer, he says he tries not to think too much about the Iraq war, but he does keep in touch with friends who are still serving or still preparing to deploy yet again to Iraq.
And, again, as he follows this all out, he says he would not have believed when he rode into Baghdad on his tank five years ago, six years ago next month, that, six years from now, Iraq would still be a combat zone.
BLITZER: Yes, a lot of people didn't believe that.
All right, John, thanks very much.
John's going to have a lot more on this story coming up Sunday morning on "STATE OF THE UNION." He also has an exclusive interview with the former Vice President of the United States Dick Cheney, his first TV interview since leaving office, Sunday morning, 9:00 a.m. Eastern to 1:00 p.m. Eastern, "STATE OF THE UNION."
Activists rallied on Capitol Hill today against the U.S. military's don't ask/don't tell rule, which requires gay personnel to keep their sexuality a secret. Service members are still being discharged for violating that rule.
Congressman Jim Moran, a Democrat from Virginia, is comparing the U.S. policy to that of some U.S. foes. So, what's he referring to?
We asked CNN's Kate Bolduan to take a closer look.
What's going on, Kate?
KATE BOLDUAN, CNN CORRESPONDENT: Hey there, Wolf.
Well, Congressman Jim Moran, he is a longtime opponent of this policy. And he's now trying to ratchet up the pressure to repeal don't ask/don't tell. He says it's out of date, counterproductive, in a time when the country relies so greatly on the military.
Listen here.
(BEGIN VIDEO CLIP)
MORAN: This policy has to change. I mean, the other countries that are implementing this policy are Iran, North Korea, China, and Russia.
Every European country, and Canada, Israel, they all have a policy that looks at the skills, the ability, the willingness to serve of men and women. And they don't reject them on the basis of sexual orientation.
(END VIDEO CLIP)
BOLDUAN: And Moran is now requesting monthly updates from the Pentagon on the number of military let go because of this policy. And, Wolf, he says he's going to continue that until it's repealed.
BLITZER: Do we have any numbers? Do we know how many people have been fired, how many people have been let go recently?
BOLDUAN: Well, according to Congressman Moran, 11 soldiers in the month of January were discharged under don't ask/don't tell, an intelligence collector, a military police officer, and infantry members, among others.
And since the policy took effect 15 years ago, more than 12,000 service members have been discharged, this according to Service Members Legal Defense Network, a group fighting to lift the ban. The group says that number includes hundreds of mission-critical specialists, like linguists.
Now, President Obama has promised to lift the ban, but no word on how or when. Obviously, Wolf, he has many other pressing issues taking his attention and that are his priority right now.
BLITZER: I assume he's going to get to that at some point.
BOLDUAN: He promised.
BLITZER: We will see when he does. Thanks very much, Kate, for that report.
BOLDUAN: Of course.
BLITZER: President Obama is setting a record, but it's not necessarily a good one. We're investigating what's missing from his administration right now.
The president is also warning Americans that the days of maxing out credit cards is over. Stand by to hear his fresh take on where the economy stands right now.
And America's most powerful train-rider calls it money well spent. We're tracking more than a billion stimulus dollars going to Amtrak.
Stay with us. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: The man President Obama wants as the next U.S. ambassador to Iraq is getting some tough criticism right now.
Among the critics, Republican Senators Lindsey Graham and John McCain.
Let's bring in our senior congressional correspondent, Dana Bash.
Dana, they're questioning Chris Hill's qualifications.
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Right, and his experience specifically.
Well, Chris Hill does have extensive experience in the Foreign Service. In fact, let's look at the map to talk about what he's done. First of all, most recently, he was ambassador to South Korea. While there, he was the point person on the talks with North Korea to end North Korea's nuclear program, the so-called six-party talks.
Before that, if we go over to Europe, he was ambassador to Poland. He was a special envoy. After that -- there you see Poland. He was a special envoy, I should say, before that, to Kosovo. He actually has extensive experience also in Europe.
But I want to go to another important region, the region he's tasked to serve in, Middle East, and obviously as the ambassador to Iraq. Wolf, he has no experience in the Middle East. And that is why Senator John McCain and Senator Lindsey Graham are saying that they don't necessarily think he's the right guy for this post, especially given -- look at these other men who have served in this post as ambassador to Iraq, Ryan Crocker and Zalmay Khalilzad.
Those two people have extensive experience in the Middle East and also in Iraq. They speak the language. They understand it.
So, I actually spoke with Senator Lindsey Graham earlier today. And listen to what he said. He said, "No talented Chris Hill may be, he's coming into a position where he has no background." And that is their problem.
BLITZER: The White House press secretary, Robert Gibbs, defended this choice earlier today. Let's listen to what he said.
(BEGIN VIDEO CLIP)
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The political disputes that stand in the way of continued progress in Iraq, many that have been outlined for years, call for somebody who has the unique ability to both understand and solve those challenges, and that we believe that Chris Hill possesses the skills to do exactly that.
(END VIDEO CLIP)
BLITZER: Forgive the pun. You cover the Hill for us.
(LAUGHTER)
BLITZER: How much trouble is Hill in on the Hill?
BASH: Well, look, John McCain today, I learned today that he obviously is raising concerns. He's actually going to meet with Chris Hill early next week. And they will discuss some of the issues that he has, questions about whether or not John McCain or others will put a hold on Chris Hill. That would effectively block the nomination.
But, Wolf, Democrats are rallying around Chris Hill. I want to put up on the screen a quote from Harry Reid, the Senate majority leader. He said: "Hill is precisely the kind of diplomat America needs in the Middle East and Iraq, for a long-term resolution must be achieved politically and diplomatically, not militarily. I look forward to confirming him as quickly as possible."
And not just that -- the Senate Foreign Relations chairman, John Kerry, also released a statement saying he looks forward to his confirmation hearings. He also endorsed the idea of him.
But I will tell you, that's in public. In private, I am hearing, look, they understand the concerns that he doesn't have experience in the Middle East. That's why they say these confirmation hearings are going to be important. They're not set yet.
BLITZER: We will watch the hearings before the Foreign Relations Committee. Dana, thanks very much.
BASH: Thank you.
BLITZER: Need work? Perhaps you should consider one high- profile option.
Let's go to our senior political analyst, Bill Schneider.
Bill, where can you find these job vacancies these days?
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, try Washington, D.C.
(BEGIN VIDEOTAPE)
SCHNEIDER (voice-over): Unemployment has been rising, but there's one place that's having trouble filling positions: the Obama administration. Of nearly 500 high-level appointments that require Senate confirmation, only 34 have been confirmed so far.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: We are -- we are continually looking for good people. We're continuing to get them through a very vigorous process to serve.
SCHNEIDER: Actually, the Obama administration is ahead of where the George W. Bush administration was and nearly equal to where the Clinton administration was at this point.
GIBBS: I will refer again to many of those statistics that demonstrate that we're ahead of the game in filling critical positions.
SCHNEIDER: This week saw the new labor secretary sworn in.
JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: Hilda Solis will demand to be heard. Ladies and gentlemen, why do I repeat that phrase? We have not heard much from this department in a long time.
(LAUGHTER)
(APPLAUSE)
SCHNEIDER: That leaves three Cabinet-level nominations still to be confirmed, secretary of commerce, secretary of health and human services, and U.S. trade representative. That's more unconfirmed Cabinet positions at this point than any of the last five presidents.
Deputy secretary is the number-two job in each department. Twelve out of 15 deputy secretaries have not yet been confirmed. The Treasury Department is facing the biggest challenges.
TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: Critical parts of our financial system are damaged and are working against recovery. This is a very dangerous dynamic.
SCHNEIDER: But 17 out of 19 top Treasury positions are still vacant. The job is getting done, the White House says.
GIBBS: What's been done in a few short weeks with the Treasury Department exceeds anything that might have been imagined just a few years ago.
(END VIDEOTAPE)
SCHNEIDER: Why is the Obama administration having such a tough time filling jobs? Well, because it's imposing tough standards, and appointees are facing tough scrutiny.
In recent weeks, Wolf, we have seen four people withdraw their names from consideration for top Treasury Department positions, including two for deputy secretary -- Wolf.
BLITZER: And, as you point out, that's the number-two position in the Treasury Department.
Bill Schneider, thank you.
Here's something you should know: Bookstores are out. Libraries are in. Not everyone is suffering because of the recession. We have been talking to winners and losers. Stand by. Candy Crowley is here.
The vice president is defending stimulus money for Amtrak. But how many jobs actually will come out of this?
And stand by also to hear one of our I-Reporters weigh in on whether states should have the right to spend stimulus dollars as they see fit.
Stay with us. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now: Wall Street swindler Bernard Madoff is asking to leave jail a day after arriving. Madoff pleaded guilty yesterday to pulling off a multibillion-dollar investment scheme. His lawyers want him freed while he awaits sentencing -- sentencing in mid-June.
Barbara Bush is out of a Texas hospital nine days after heart surgery. Surgeons replaced her aortic valve with a pig valve. The 83-year-old former first lady says this Friday the 13th is lucky.
We wish her only the best.
And NASA will try once again on Sunday to launch the shuttle Discovery, assuming a leaking fuel tank is fixed by then.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
Many of you may be settling down to dinner right now. Some of you are worrying about paying for dinner and other things you need. How might economic prosperity get flowing again? President Obama says his administration is focused precisely on that.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The thing I want to emphasize is, is that we are spending every day working through how to get credit flowing again so that businesses, large and small, as well as consumers, are able to obtain credit and we can get this economy moving again.
As I've said before, that's one of the legs of the stool in rebuilding the economy. The first one -- a stimulus package that is going to be hitting the ground and putting people back to work. The second part of this is making sure that not just the banking system, but also the credit system as a whole is functioning and that we fix some of the plumbing there.
(END VIDEO CLIP)
BLITZER: The president also gives this message -- to go back to prosperity, the United States needs to go back to basics.
(BEGIN VIDEO CLIP)
OBAMA: It is very important, even as we're focused on the financial system and the credit markets, that we are laying the foundation for what I'm calling a post-bubble economic growth model. The days when we are going to be able to grow this economy just on an overheated housing market or people spending -- maxing out on their credit cards, those days are over.
What we need to do is go back to fundamentals. And that means driving our health care costs down. It means improving our education system so our children are prepared and we're innovating in science and technology. And it means that we're making this transition to the clean energy economy.
(END VIDEO CLIP)
BLITZER: Meanwhile, even with this recession, the president talks about something very important that you feel confident about.
(BEGIN VIDEO CLIP)
OBAMA: So what we need to do is to make sure that we're putting in the pillars economically to deal with the short-term emergency, to stabilize the economy and to put in the foundation for long-term economic growth.
That's a overarching package that I think the American people are hungry for. They feel confident about America. The business executives I met with yesterday are confident about our ability to grow long- term. We've got to get through this difficult period.
And, look, there are a lot of individual families who are experiencing incredible pain and hardship right now. If you've been laid off at your job, if you've lost your home, then, you know, right now is very tough. But we're providing help along the way. That's why we put a housing program in place. That's why we're going to be announcing additional steps to help small businesses.
But if we are -- if we are keeping focused on all the fundamentally sound aspects of our economy -- all the outstanding companies, workers, all the innovation and dynamism in this economy -- then we're going to get through this. And I'm very confident about that.
(END VIDEO CLIP)
BLITZER: We're hearing a lot about the pain and suffering during this recession. But the truth is some businesses out there are actually profiting off the public's belt tightening.
Our senior political correspondent, Candy Crowley, has been talking to some of the winners and losers in this economy.
What are you finding -- Candy?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: You know, Wolf, a couple of days ago, Warren Buffett said that Americans are changing their buying habits in ways we've never seen before. We have to add to that, that various industries have the figures to prove it.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: I'd like to help someone over here.
CROWLEY (voice-over): There are new faces at Shoppers Food Warehouse in suburban Virginia and the regulars buy differently.
ELIZABETH "BETTY" RILEY, ALEXANDRIA RESIDENT: Before I browsed, shopped and bought way too much of stuff that I didn't really need. So now I'm more specific. I make a list and I follow the list.
CROWLEY: It's the return of a penny saved is a penny earned. There are an awful lot of Betty Rileys in the aisles, armed with lists and coupons and budgets.
TOM MOWERY, V.P. (PH), SHOPPERS FOOD WAREHOUSE: One of our lockdowns for the month of March is iceberg lettuce.
CROWLEY: People are buying a lot more chicken, flocking to store brand merchandise and picking up loads of frozen dinners.
MOWERY: I suppose that's because of the restaurants, you know, losing that business. Customers can come here at a cheaper price and buy those things.
Our frozen food sales are up substantially from where they were in the past.
CROWLEY: It's not just five star restaurants that are hurting. Hot and quick relatively cheap, Domino's Pizza took a bit of a hit in the fourth quarter -- domestic sales off 3 percent.
DIANE KRESH, DIRECTOR, ARLINGTON COUNTY, VIRGINIA LIBRARY: It's free. Everything is free.
CROWLEY: For books, DVDs, children and adult programs, Internet access, computer training and job search resources, it's hard to beat free. These are boom times for public libraries.
KRESH: People tend to think of the library as the homey place where you go in and read a book and have story time. And we're really about helping people manage their lives.
CROWLEY: In the past couple of months, Diane Kresh at the Arlington County, Virginia Library has seen a 7 percent increase in foot traffic -- and traffic jams at the computers.
KRESH: When we open in the morning, people make a beeline. And these terminals are -- are generally full.
CROWLEY: In nearby Montgomery County, Maryland, library visits are up 41 percent. Not so much at Borders, posting an 11.7 percent sales decline over the holiday period.
The tale of changing lifestyles is also told online, in the classified ad service of Craigslist. In the last year, garage sale ads were up 100 percent. As unemployment soared, ads for roommates went up 65 percent. For sale postings, up 75 percent.
And there's a doubling of barter offers. Like this musician wanting to swap a gig for dental care. In this economy, you do what you've got to do.
(END VIDEO TAPE)
CROWLEY: There are many examples of this. I spoke with three big hospitals yesterday and this morning, who anecdotally talk of people who are putting off non-critical but important surgery. One administrator said it does not appear to be a problem of money, but, rather, Wolf, an unwillingness to take time out of work in an unstable job market.
BLITZER: Fascinating stuff.
Thanks for putting that together, Candy.
All right. We're hearing a striking new tone from President Obama and his economic advisers. We're going to talk about the change in how Americans are reacting. And I'm joined by the best political team on television.
And we'll also discuss a brand new DNC Web site calling the Republicans -- and I'm quoting now -- "the party of no."
Is it a strategy that can work?
Stay with us. You're in THE SITUATION ROOM
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The American people need to understand that they can have confidence in that brighter days are ahead.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
LARRY SUMMERS, CHAIRMAN, WHITE HOUSE NATIONAL ECONOMIC COUNCIL: I am confident that with the strong and sound policies the president has put forward and the passage of time, we will restore economic growth.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
OBAMA: We're going to get through this. And I'm very confident about that.
(END VIDEO CLIP)
BLITZER: The Obama administration now accentuating the positive.
We're back with the best political team on television -- our senior political analyst, Gloria Borger; our CNN contributor, Steve Hayes, of the "Weekly Standard;" and our chief national correspondent, John King the anchor of "STATE OF THE UNION".
It's a new tone we're clearly hearing from the White House.
And I guess the question is this, is it paying off, because this week was a very good week, relatively speaking, for the stock market?
GLORIA BORGER, SENIOR POLITICAL ANALYST: Yes. I don't think you can draw a straight line between the stock market and the administration's new confidence, let's put it that way. We're hearing the words confidence. I'm told, talking to folks in the White House, they keep using the word foundation now. That what they feel is they've built the foundation -- the pillars is what Larry Summers called it today -- and that they want to tell the American people, OK, we are connecting the dots and there's a light at the end of the tunnel, because they're kind of done with the scary stuff. They did that to get the stimulus package passed.
BLITZER: We're not hearing a whole lot of talk about the dire circumstances and the awful catastrophe that's going on.
BORGER: Right.
BLITZER: It's deliberate, I assume. STEPHEN HAYES, SENIOR WRITER "THE WEEKLY STANDARD": Yes, I think it is. I mean this -- we talked -- we've been talking about this for weeks. He needed to get more positive. I think it's good that he got more positive. You know, Bill Clinton criticized him about three weeks ago and said you need to end your speeches, even when you're sort of dealing with the harsh realities, you need to end them with an up note. And I think he's doing that now. We're seeing that everybody is doing that.
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: If it's that easy, Wolf, alls they have to do is talk up the economy and it goes up...
BORGER: Right.
KING: ...I want them to tell me the Powerball number.
But look, there's a secret in Washington, and that is that they know things before we do. They know things before the public do. They knew G.M. was not going to ask for more money right away, a couple days before it was made public. They see the economic data coming in.
So they saw that this week would be a reasonably, relatively good week compared to what we have had in the past.
One week does not a rally make. But we're ending this week -- the market was up, I guess, 9 percent this week. It's been a long time -- I think since Thanksgiving -- since the American people have been able to go home for the weekend thinking whooo.
BLITZER: But the downside -- the potential downside is if it gets worse, let's say, next week or next month or whatever...
BORGER: Right.
BLITZER: ...then people will come back and say, why were you, you know, misleading us?
BORGER: That's right. But, you know, what they're trying to do is instill confidence in the American people -- letting them know that they've taken these steps. You've certainly seen enough of the president lately. Some people say too much. He's been out there being an activist president. And what they want to do is instill confidence. And part of that is psychology.
BLITZER: And the DNC is wasting no time going after the Republicans. You've seen that new little Web ad that they have going out.
I'll play a little clip, because they go after the Republican leadership in the House and the Senate.
(BEGIN VIDEO CLIP, COURTESY DEMOCRATS.ORG)
UNIDENTIFIED MALE: No.
UNIDENTIFIED MALE: Nope. UNIDENTIFIED MALE: No.
UNIDENTIFIED MALE: Nope.
UNIDENTIFIED MALE: No.
UNIDENTIFIED MALE: Nope.
(END VIDEO CLIP)
BLITZER: You can go to that Web site and hear a lot of nos.
They're calling the Republicans, Steve, "the party of no."
Is this kind of strategy going to work?
HAYES: I don't think so. I mean, first of all, it's actually not true. I mean Republicans have been putting out...
BORGER: It's not?
HAYES: ...idea after idea after idea. I would argue, too many ideas, in some cases.
No, they've had alternative stimulus packages. They've had, you know, alternatives to the budget. I mean they've got alternatives all over the place. They don't get that much attention because Republicans aren't in power. It's the natural sort of cycle of these things.
But I don't think this -- I don't think this will stick.
BLITZER: John Boehner, the Republican leader in the House, he said this: "If I had to defend the president's budget, which is being eviscerated by both parties because it spends too much, taxes and borrows too much, I'd probably waste time on fictitious claims like this, too."
A strong statement from Boehner.
KING: And remember, House Republicans are different from Senate Republicans in that those House Republicans are mostly from safe districts. So they feel confident they can oppose Barack Obama's budget and his spending priorities. And you see that in the polling.
Wolf, this is great theater right now and it's a lot of fun politically and it's good to have the parties going back at it, from a political standpoint, if you do what we do.
Will it work?
We won't know that answer until the mid-term elections.
BLITZER: You know, but...
(CROSSTALK)
KING: Is the economy coming back?
BORGER: That's right.
KING: Did the Republicans field good candidates?
History -- history, says the Republicans, will do well next year.
BLITZER: But did the Democrats...
(CROSSTALK)
BLITZER: Did the Democrats take a risk by doing something frivolous, let's say, like this, politically frivolous, at a time of such enormity?
When millions of people are losing their jobs and they're really worried about the economic security of the country and their families, the DNC is playing, you know, little word games with no, no, no.
BORGER: Yes, they're playing. That's their job. You know, they're playing little word games. It's kind of a sideshow.
I mean I -- I believe that there is a downside for Republicans in all of this, because as you head into the midterm elections, if things are working, if the economy starts improving, then what's your campaign platform?
I was rooting for -- what?
HAYES: Yes, but they haven't...
BORGER: Failure or for the economy...
HAYES: They haven't been rooting for failure.
BORGER: For this not to succeed?
exactly. But that's what the Democrats will say.
KING: Right.
BORGER: The Democrats will say you were rooting for -- for all of this tonic that we've provided not to succeed. It's a tough argument to make (INAUDIBLE).
HAYES: But there's been a big split among Republicans between conservatives and moderates and then the Congressional leadership. Conservatives are saying, look, you have to challenge the president more frontally, make him own these policies in a way that will identify with it -- him with those policies when they go to the polls.
BLITZER: We've got to leave it there, guys.
BORGER: He'll own it.
BLITZER: John's going to have a lot more Sunday morning on "STATE OF THE UNION," on this and a lot more, including his exclusive interview with the former vice president, Dick Cheney -- the first time he's spoken on TV since the new presidency.
You could call it the money train -- more than a billion stimulus dollars are going to Amtrak.
So what will it mean for cheaper fares for you?
And when it comes to spending your money, who's more responsible -- would it be the federal government or your state?
Our iReporters are responding.
And you're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Coming up at the top of the hour on "LOU DOBBS TONIGHT," the Obama administration abandoning the term "enemy combatants" for terrorist suspects held in Guantanamo Bay. Critics say the move is nothing more than a P.R. Stunt. And we'll have that story.
Also, new evidence that members of the president's cabinet and administration are outright supporters of illegal aliens. And some are determined to completely open our borders and stop the enforcement of our immigration laws. We'll have that report.
And the pro-amnesty, ethno-centric, Democratic left-wing members of Congress and the liberal national media intensifying an overt campaign to remove Sheriff Joe Arpaio of Arizona from office -- all because he's enforcing our immigration laws. One of the sheriff's biggest supporters is Congressman Trent Franks. He'll be among our guests here tonight.
Please join us for all of that, all the day's news, a lot more of politics at the top of the hour.
THE SITUATION ROOM with Wolf Blitzer will continue in a moment.
(COMMERCIAL BREAK)
BLITZER: All aboard the economic stimulus train. Right now, Amtrak is getting more than $1 billion in federal funding. The vice president, Joe Biden, says your taxpayer money will put more of you to work, as well as improve your experience on the nation's largest passenger rail system.
Our Congressional correspondent, Brianna Keilar, is here -- Brianna, here's the question -- will all this money and Amtrak really create jobs?
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Amtrak, Wolf, hasn't put out an official number. But it is expected to create thousands of jobs. It's also creating a controversy.
(BEGIN VIDEOTAPE)
KEILAR (voice-over): When he was senator, Vice President Joe Biden rode the train almost daily between Washington and his home in Delaware. Now he's cheering the 1.3 billion stimulus dollars the federal government just gave to Amtrak.
JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: It is an absolute national treasure and necessity. Now, for too long, we've failed to make the investments we should have been making in Amtrak, in order to provide the kind of reliable and secure inter city rail service we need.
KEILAR: That includes fixing up aging rail lines, train stations, tunnels and bridges across the country -- much of it going here, the busy Northeast Corridor between Boston, New York and Washington. The Amtrak Acela, the fastest train between New York and Washington, takes about three hours. On improved rail lines, that trip could shrink to two-and-a-half.
But critics like Oklahoma Senator Tom Coburn say it's a stimulus handout that wastes taxpayer money.
SEN. TOM COBURN (R), OKLAHOMA: Amtrak is highly inefficient. It's been a loser ever since we privatized it. We lost about $2 billion last year requiring government subsidies. And it's poorly run and poorly managed. It's not being against trains. It's not being against Amtrak. It's against being stupid.
(END VIDEO TAPE)
BLITZER: Senator Coburn, we have to say, is from Oklahoma, which doesn't exactly have a huge commuter -- train commuter issue going on out there.
Who are the senators, who are the members of Congress who are really pushing this?
KEILAR: And the ones that we saw out there today, it's no coincidence they are from these states that are served by Amtrak -- Arlen Specter from Pennsylvania; John Kerry from Massachusetts; Jay Rockefeller from West Virginia.
And important to note, Wolf, of course very powerful players here in Washington.
BLITZER: They certainly are. And they love those train rides.
KEILAR: Sure do.
BLITZER: A lot of people up on the East Coast, the Eastern Seaboard, love them, as well.
Thanks very much, Brianna, for that.
Let's go back to Jack.
He has The Cafferty File -- Jack.
CAFFERTY: Are you telling me there's no Acela trains between Tulsa and Oklahoma City?
BLITZER: Well, there might be, for all I know.
CAFFERTY: No, I'm sure there...
(LAUGHTER)
CAFFERTY: I'm sure there isn't. Freight trains. There's some freight trains out there.
The question this hour is, when it comes to the economy, whom do you trust?
Terrell in Escondido, California: "I certainly don't trust any Republican. Had we not spent hundreds of billions of dollars in Iraq, the economy would be just fine. This was bin Laden's stated plan -- bankrupt America. And it's working."
F. in Tennessee: "Our president. I believe he speaks the truth -- good or bad and tells it like it is. And I believe that -- that I believe in. Too many years of lies, too many years of being betrayed."
Beverly in Virginia says: "I'm going to have to go with Obama and his geeks. The amnesic borrow and earmark Republicans are being born again and they're going back to their trickle-down and free spending policies. Their policies have been tried and look where we are. Let's let the geeks and the rocket scientists take a crack at fixing these complex problems."
Ron in Oklahoma: "Who do I trust on the economy? Nobody. The actions of the president, Congress, businesses, banks, etc. have destroyed all trust. That will have to be earned. Let's all hope that they're capable of earning that trust back again, because if not, we're all in for a very rough ride."
Jim writes: "Jack, I don't trust any of them right now, the Democrats least of all. Obama and the Democrats in both houses are going to bankrupt your great country. The Republicans are letting them do it, with barely a whimper."
Ted writes: "The only person I've come to trust relative to my well being and that of this country is Barack Obama. I don't feel he's a politician out for his own personal gain. The rest of them you can toss, for all I care. They come across as just as greedy and needy as those expletive corporate moguls who could give a damn about the working class in this country."
And Kassie in California writes: "I trust my mattress Jack. I would have been better off if I had hidden my money underneath my mattress rather than investing it in so-called safe investments."
If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile and look for yours there among hundreds of others.
Have yourself a tidy little weekend, Mr. Blitzer.
I'll see you Monday.
BLITZER: OK. See you Monday, Jack.
And get ready, "Now or Never," the new book, it's coming out in bookstores in the next few days. Next week, we're going to talk about it because I want to -- I want you to tell our viewers some of those personal stories that you relate in the book, as well.
Are you up for that?
CAFFERTY: I'll be happy to.
BLITZER: All right. We'll see you next week, Jack.
Thank you.
CAFFERTY: All right.
BLITZER: And look at this, Jack.
We asked our own iReporters yesterday to tell us who should be holding the purse strings for the stimulus money, the federal government or the states?
Here's one of the responses we got.
(BEGIN VIDEO CLIP)
ADRIANNA MAXWELL, IREPORTER FROM MARIETTA, GEORGIA: I think it should be a little built of both. I think there are some aspects of the Recovery Act that I think the state is best able to make judgments in regards to shovel ready projects.
(END VIDEO CLIP)
BLITZER: On Monday, we're digging deeper into the economic crisis -- indeed, all of next week -- how it's affecting you.
What are you dying to ask our experts about the economy?
You can submit your video questions to iReport.com/situationroom.
We're going to have answers for you next week right here in THE SITUATION ROOM.
You probably didn't know that the Worldwide Web has an inventor and that today is the anniversary of its creation. A scene from the celebration in today's Hot Shots.
Stay with us.
You're in THE SITUATION ROOM. (COMMERCIAL BREAK)
BLITZER: Here's a look at some Hot Shots coming in from our friends at the Associated Press -- pictures likely to be in your newspapers tomorrow.
In Pakistan, a police officer removes burning tires set on fire by protesters.
In Switzerland, the inventor of the Worldwide Web, Tim Berners- Lee, shows off the first Web server.
In Australia, a conservation officer saves a pelican from an oil spill.
And in Italy, a couple shares an intimate moment on Juliet's balcony -- soon to be open for weddings.
Some of this hour's Hot Shots -- pictures often worth a thousand words.
We want you to check out our political podcast. To get the best political team to go, you can subscribe at CNN.com/situation room.
Don't forget tomorrow, Saturday, here in THE SITUATION ROOM, 6:00 p.m. Eastern, we're going to have a lot more about what's going on. Our Saturday edition, 6:00 p.m. Eastern.
I'm Wolf Blitzer in THE SITUATION ROOM.
Up next, "LOU DOBBS TONIGHT" -- Lou.
